Debt Free Principles

Thursday, October 24, 2013

WE'VE MOVED

Debt Free Principles is now Debt Free Guys located at www.debtfreeguys.com. Please stay connected with us there, Twitter and Facebook.

Monday, October 21, 2013

Robert Kiyosaki, Rich Dad, defines being wealthy as having your investments exceeding your expenses. This can be done through your own business or businesses, investments in the stock market, real-estate and/or minimizing your expenses. The day you don't have to rely on someone else for enough of a salary to cover your expenses you're wealthy.

Changes to Calculating Credit Scores Pending in Congress

We can see how this will help most, but it will hurt some.

More - Money Mistakes to Avoid in Your 20s

Foreclosing or Walking Away from Your Home Has Consequences

Home owners that foreclosed, walked away or defaulted on a previous mortgage are finding it hard to get financing now that the housing market seems to be turning around. They shouldn't be surprised. Their activity stays on their financial records and often impacts FICO scores, which is the gauge lenders use to determine lend-ability. That's why it's key to always live below your means and have emergency savings.

More - Mortgage Relief Program

In the Market for a Car?

Buying a used car is likely the most cost effective. Do your homework first, however, and make sure you're getting what you're expecting.

More - You Can Afford the Car But Can You Afford to Drive It?

Retail Shoppers Have Disappeared

The government shutdown impacted retail sales. With the next scheduled crisis just after the holidays, current spending levels authorized through 01/15/2014 and the debt cushion extended through 02/07/2014, shoppers aren't likely to loosen the purse strings this holiday season.

More - "Do you want to save 10% on your purchase today?" "No."

Sunday, October 20, 2013

You Can Afford the Car But Can You Afford to Drive It?

Most of us typically dream about driving a nice car. It seems that Americans especially have always had an affair with their cars. We have been barraged with images of vehicles from the time we are children into adulthood in toys, cartoons, posters and every other commercial during a typical Sunday football game.

I personally dream of some day driving my own Audi S4, but there are many other models that bring a twinkle to our eyes; Corvettes, Cadillacs, a 69 Camero, Mini Coopers, Jeep Wranglers, BMWs, the new Tesla and yes even the oh so humble Toyota Camry. I need someone to explain that last one to me though.

So you know what car revs your engine and you have it picked out and have been saving or planning ahead for it. So you can afford the car, but can you afford to drive it?

Per the U.S. Bureau of Labor Statistics the average American household has 1.9 cars and spent $8,998 on transportation costs in 2012. That is almost 17.5% of all our expenditures. Yes, you read that correctly, we spend over 17% or over half of what we spend on our homes on getting to and from them. What costs so much?

The reality with almost any purchase is that there are opportunity costs associated with them. What is an opportunity cost? That would be the additional costs to ownership. For our cars this includes among other things, gas, insurance, taxes, license and maintenance.

Here are 4 ways to save on car expenses:

1. Raise your insurance deductible- put away your deductible in an emergency account and raise your deductable from $250 or $550 to $1000. This can save you $10, 20 or even more on your monthly insurance premium. Insure yourself rather than paying the extra to an insurance company

2. Shop around for insurance – there are many providers out there shop around and pit them against each other. There are many online tools you can use to shop for insurance

3. Premium gas – your owner’s manual says you need the top of the line gas, but do you really? Switch between the top grade and medium grade every other time and save yourself a few dollars each fill up

4. Refi – you do it with your home, why not try it with your car. If you are still out a few years on your loan shop around for a lower rate on your loan. Switching banks can save you a few dollars a month on your loan

Saturday, October 19, 2013

Is Dining Out Killing Your Budget?

I don’t know about your area, but in Denver it seems like there has been a recent explosion in the number of new restaurants. From my personal observation the increase seems to be tied to more and more low to mid cost restaurants opening; i.e. Chipotle, Panera Bread, Noodles & Co and Garbanzos.

According to the U.S. Bureau of Labor Statistics the average American household spends $2678 or approximately 40% of our food expenditures away from the house. Yes, you read that correctly, 40%. Now we are all aware that food typically prepared away from costs more than what we can buy and prepare for ourselves. So how do we cut back?

Four tips to reduce your dining out costs:

1. Coupons and deals – use local coupons and deal finders such as the Entertainment Book, Groupon and Living Social to get 50% or more off. Two things to keep in mind, the deals are usually there to lure you into spending, so don’t end up spending more by adding on items like alcohol and desserts, and remember to tip your server on the full amount not the discount. You received the same level of service; the restaurant should take the hit not the waiter/waitress.

2. Downgrade – moving from sit down restaurants to quick casual can help save, not only on the need to tip, but also the overall cost. Why go to an upscale restaurant to order a burger and fries, when you can find an equivalent for cheaper.

3. Reduce your portion intake – do you usually have a take home bag after a meal out? Then you probably have the “eyes bigger than your stomach” syndrome. Why not forgo the appetizer and just have the main meal, or split one appetizer between several people? The same goes for desserts.

4. Reduce the frequency – by cutting out one or two dining out trips a month by planning and preparing ahead. An hour or two preparing quick meals in advance can save you from needing to stop. We suggest making a big pot of chili or soup and putting some in the freezer for those nights when you just don’t feel like cooking.

Dining out doesn’t need to take a big bite out of your budget. Implement the four tips above and you could save 10, 20 or 50% off of your budget, giving you more money to put towards debt and your financial future.

More - Are you spending too much?

Interest Rate? What Interest Rate?

The gap between 30-year fixed rates and one-month CDs or a saving's account rate is widening, making it more difficult for savers. This especially hurts the middle class and retirees

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